CR Inflation Rate MoM for December 2025 Shows Sharp Slowdown to 0.08%
Key Takeaways: December 2025 inflation in CR slowed markedly to 0.08% MoM, well below the 0.20% estimate and sharply down from November’s 0.47%. This deceleration signals easing price pressures amid tighter monetary policy and subdued demand. External risks remain, but fiscal discipline and stable financial markets support a moderate inflation outlook for early 2026.
Table of Contents
CR’s inflation rate MoM for December 2025 registered a modest 0.08%, according to the latest release from the Sigmanomics database on January 8, 2026. This figure contrasts sharply with November’s 0.47% and falls short of the 0.20% consensus forecast. The data reflects a significant easing in monthly price increases after a period of elevated inflation in late 2025.
Drivers This Month
- Energy prices stabilized after prior volatility, contributing +0.02 pp.
- Food inflation slowed, adding +0.01 pp, reflecting improved supply chains.
- Core services inflation remained steady, contributing +0.05 pp.
Policy Pulse
The reading sits comfortably below the central bank’s 0.15% monthly target, suggesting that recent monetary tightening is beginning to temper inflationary pressures. The central bank’s key policy rate increased by 50 basis points in November, aiming to anchor expectations.
Market Lens
Immediate reaction: The CRC currency strengthened 0.3% against the USD within the first hour post-release, while 2-year government bond yields declined 5 basis points, reflecting eased inflation concerns.
Examining core macroeconomic indicators provides context for the inflation slowdown. GDP growth for Q4 2025 is estimated at 2.1% YoY, down from 2.7% in Q3, indicating cooling demand. Unemployment remains stable at 5.4%, while wage growth moderated to 3.2% YoY in December, easing wage-push inflation risks.
Monetary Policy & Financial Conditions
The central bank’s tightening cycle, initiated mid-2025, has raised the policy rate from 4.0% to 5.0%. Credit growth slowed to 4.5% YoY in December from 6.0% in October, reflecting tighter lending standards. Inflation expectations for 2026 have adjusted downward to 3.1% from 3.6% six months ago.
Fiscal Policy & Government Budget
Fiscal discipline remains a cornerstone, with the government maintaining a primary surplus of 1.2% of GDP in Q4 2025. Public spending growth slowed to 1.5% YoY, helping contain demand-pull inflation. The budget outlook for 2026 projects a deficit reduction to 2.8% of GDP, supporting macro stability.
External Shocks & Geopolitical Risks
Global commodity prices stabilized in December, with Brent crude averaging $78/barrel, down from $85 in October. Geopolitical tensions in neighboring regions have not escalated, reducing risk premiums. However, supply chain uncertainties persist, warranting cautious monitoring.
What This Chart Tells Us
Market Lens
Immediate reaction: The CRC/USD exchange rate appreciated 0.3%, reflecting improved confidence in the currency amid easing inflation. Short-term government bond yields fell by 5 basis points, signaling reduced inflation risk premia. Equity markets showed mild gains, with the CRX index up 0.4%.
Looking ahead, inflation in CR faces a mix of upside and downside risks. The baseline scenario projects monthly inflation averaging 0.10%–0.15% in Q1 2026, supported by stable energy prices and moderate wage growth. The central bank is expected to maintain a cautious stance, balancing growth and inflation control.
Bullish Scenario (20% Probability)
- Stronger-than-expected global demand pushes commodity prices higher.
- Supply chain disruptions resurface, causing input cost inflation.
- Domestic wage growth accelerates beyond 4% YoY.
Base Scenario (60% Probability)
- Inflation remains contained around 0.10%–0.15% MoM.
- Monetary policy stays restrictive but accommodative enough to support growth.
- Fiscal discipline continues to limit demand-pull pressures.
Bearish Scenario (20% Probability)
- Global economic slowdown depresses demand, pushing inflation below 0.05% MoM.
- Currency appreciation pressures export sectors, slowing growth.
- Deflationary risks emerge if wage growth stalls further.
December 2025’s inflation rate MoM of 0.08% in CR signals a welcome easing of price pressures after a volatile 2025. The data from the Sigmanomics database confirms that monetary tightening and fiscal prudence are bearing fruit. While external risks remain, the macroeconomic environment appears balanced, with inflation expectations stabilizing near target. Policymakers should remain vigilant but can cautiously anticipate a period of moderate inflation and steady growth in early 2026.
Key Markets Likely to React to Inflation Rate MoM
The CR inflation rate MoM release typically influences currency, bond, equity, and commodity markets sensitive to inflation expectations and monetary policy shifts. The following symbols historically track inflation dynamics closely:
- USDCAD – The USD/CAD pair often reacts to inflation data due to Canada’s commodity-linked economy and monetary policy alignment.
- CRX – CR’s main equity index, sensitive to inflation-driven cost pressures and consumer demand.
- EURUSD – A major currency pair reflecting global risk sentiment and inflation expectations.
- BTCUSD – Bitcoin often reacts to inflation data as a perceived inflation hedge.
- SPX – The S&P 500 index, reflecting broader market sentiment on inflation and growth prospects.
Inflation Rate vs. CRX Index Since 2020
Since 2020, CR’s monthly inflation rate and the CRX equity index have shown a moderate inverse correlation. Periods of rising inflation often coincide with short-term equity volatility, while stable inflation supports steady market gains. The recent slowdown in inflation aligns with a rebound in CRX, suggesting improved investor confidence amid easing price pressures.
Frequently Asked Questions
- What does the December 2025 inflation rate MoM indicate for CR’s economy?
- The 0.08% inflation rate MoM suggests easing price pressures, reflecting effective monetary policy and subdued demand.
- How does this inflation reading compare historically?
- December’s 0.08% is below November’s 0.47% and the 12-month average of 0.12%, marking a significant slowdown.
- What are the key risks to inflation going forward?
- Upside risks include commodity price shocks and wage acceleration; downside risks involve global slowdown and deflationary pressures.
Takeaway: CR’s December 2025 inflation rate MoM slowdown to 0.08% signals a turning point toward price stability, supporting a balanced macro outlook for 2026.
Updated 1/8/26
This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.
December 2025’s inflation rate MoM of 0.08% marks a sharp deceleration from November’s 0.47% and is well below the 12-month average of 0.12%. This reversal follows a brief inflation surge in August (0.52%) and December 2024’s low base (-0.40%). The trend suggests a return to more moderate price gains after episodic volatility.
Comparing recent months, October and September 2025 posted deflationary readings of -0.40% and -0.21%, respectively, indicating a volatile inflation environment. December’s positive but subdued print signals stabilization rather than renewed acceleration.